Macronix — Interim / Quarterly Report 2014

Jul 30, 2014

Macronix International Co., Ltd. Second Quarter 2014 Results July 30, 2014

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Disclaimer

The presentation and discussion contain certain forward-looking statements with respect to the results of operation, financial condition and current expectation. The forward-looking statements are subject to known and unknown uncertainties and risks that could cause actual results to differ materially from those expressed or implied by such statements.

Such risks and uncertainties include but are not limited to the impact of competitive products and pricing, timely design acceptance by our customers, timely introduction of new technologies, ability to ramp new products into volume, industry wide shifts in supply and demand for semiconductor products, industry overcapacity, availability of manufacturing capacity, financial stability in end markets, and other risks.

The forward-looking statements in this release reflect the current belief of Macronix as of the date of this release and Macronix undertakes no obligation to update these forward-looking statements for events or circumstances that occur subsequent to such date.

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Copyright © Macronix International Co., Ltd. 1
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Agenda

Welcome

2014Q2 Financial Results Business Update Remarks and Q&A

C.Y. Lu Paul Yeh C.Y. Lu C.Y. Lu

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Copyright © Macronix International Co., Ltd. 2
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Major Second Quarter Highlights

2014Q2 2014Q1 Actual Actual Revenue NT$ 5.0B NT$ 4.8 B Gross margin % 6% 18% Operating margin % -36% -27%

• Revenue sequentially increased by 4% because of better demand in flash products

• Gross margin sequentially decreased by 12ppt because of lower utilization & inventory write-down

• OP margin decreased sequentially due to lower gross profit

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Copyright © Macronix International Co., Ltd. 3
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Agenda

Welcome

Welcome C.Y. Lu 2014Q2 Financial Results Paul Yeh Business Update C.Y. Lu Remarks and Q&A C.Y. Lu

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Quarterly Consolidated Statements of Comprehensive Income

Unit: N	2014/Q2 2014/Q1 2013/Q2 Net Sales 4,973 4,790 5,231 Gross Profit 278 860 225 Gross Margin% 6% 18% 4% Operating Expenses (2,076) (2,131) (2,089) Operating Income (1,798) (1,271) (1,864) Net Non-Operating Income (Loss) (2) (13) 11 Income Before Taxes (1,800) (1,284) (1,853) Income Taxes (2) (1) (1) Net Income (1,802) (1,285) (1,854) Other Comprehensive Income (25) 265 (72) Comprehensive Income (1,827) (1,020) (1,926) Net Income(Loss) Attributable to : Shareholders of the Parent (1,796) (1,276) (1,840) NoncontrollingInterests (6) (9) (14) TD Million (except EPS)	QoQ YoY Change Change 4% (5%) (68%) 23% -12ppt 2ppt (3%) (1%) 41% (4%) (82%) 40% (3%) 78% 90% 40% (3%) (65%) 79% (5%) 41% (2%) (36%) (59%)
	EPS*(NT$) (0.51) (0.36) (0.52)	43% (1%)
	Weighted Average Outstanding Million Shares 3,518 3,518 3,518

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2014Q2 Financial Highlights

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2014 YTD Sales = NTD 9,763 M 2014 YTD GP = NTD 1,138M
+1% YoY
Sales Gross Profit
NTD M NTD M
1,138M
10,000 9,636M 9,763M
1,250
8,000
40M
6,000
750
4,000
2,000 250
0
13Q1 Q2 Q3 Q4 14Q1 Q2
13Q1 Q2 Q3 Q4 14Q1 14Q2 (250)
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2014Q2 Financial Highlights

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2014Q2 2013Q2
Gross Margin (%) 6% 4%
EPS (NTD) (0.51) (0.52)
Gross Margin (%) EPS
EPS numbers are retro-adjusted
NTD
1.00
18% 18%
0.75
12%
(1.79)
6% 0.50
4%
0.25
0.00
Q2 Q3 Q4 14Q1 Q2 13Q1 Q2 Q3 Q4 14Q1 Q2
(0.25)
(0.26)
(0.36)
(0.50) (0.42)
(0.59) (0.52) (0.51)
(0.75)
(1.00)
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GM%
25%
18% 18%
12%
15%
6%
4%
5%
(4%)
-5% 13Q1 Q2 Q3 Q4 14Q1 Q2
-15%
-25%
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Quarterly Consolidated Balance Sheet / Cash Position

Cash Inventory(Net) Property, Plant and Equipment Total Assets Interest bearing debt - short term Interest bearing debt - long term Total Liabilities Shareholders' Equity Debt Ratio (%) Book Value (NT$) Quarterly Highlight Depreciation & Amortization Capital Expenditures Cash Flow from Operating EBITDA Unit: NTD Million	2014/06/30 2014/03/31
	7,443 9,626 9,656 9,506 23,607 25,321 47,924 51,469 6,028 7,226 10,944 10,909 22,055 23,763 25,869 27,705 46.0% 46.2% 7.35 7.87 2014/Q2 2014/Q1
	1,902 1,886 (449) (339) (471) (857) 172 672

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Quarterly Sales Breakdown by Products (Parent Company)

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Unit: NTD Million
6,000
QoQ YoY
4,000
Change Change
63%
68% Flash +9% +7%
71%
ROM -15% -41%
FBG +12% +8%
2,000
25% * FBG (foundry business group)
19% 15%
12% 13% 14%
0
2013Q2 2014Q1 2014Q2
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Quarterly Quantity Breakdown by Products (Parent Company)

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Unit : Million
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500
400
QoQ YoY
Change Change
300
Flash +5% +7%
96% 97% 98%
ROM -1% -42%
200
FBG +10% +11%
100 * Equivalent 8” WF base for FBG
(foundry business group)
4% 3% 2%
0
2013Q2 2014Q1 2014Q2
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Quarterly Memory Sales Breakdown by Technology

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Unit: NTD Million
6,000
6%
4,000 11%
13%
17%
6%
8%
15%
28%
45nm
24%
65 nm
75 nm
2,000
≧0.10μm
62% 55%
55%
0
2013Q2 2014Q1 2014Q2
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8 ” Equivalent Wafer- Out Trend

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Wafer Out
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
09Q1 Q2 Q3 Q4 10Q1 Q2 Q3 Q4 11Q1 Q2 Q3 Q4 12Q1 Q2 Q3 Q4 13Q1 Q2 Q3 Q4 14Q1 Q2
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Agenda

Welcome

Welcome C.Y. Lu 2014Q2 Financial Results Paul Yeh Business Update C.Y. Lu Remarks and Q&A C.Y. Lu

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Business update - ROM equivalent density shipment

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Density shipment index:
1,200 2009Q1 =100
976
1,000 914
802
800
600 528 511
502
393
365
342
400 306 350
320
193
139
200 161 156
111
120
100 106
84 83
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2009 2010 2011 2012 2013 2014
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Current status of memory business

� ROM business

• ≤45nm products represented 61% of ROM business in 14Q2

• 32nm 16/32Gb products will be released in 14Q3 and shipped in 14Q4

• Average density per unit: 6.5Gb for 2013 and 6.7Gb & 6.0Gb in 14Q1 & Q2; Expect to be much higher in Q3.

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NTD % ROM (by tech & sales)
100%
14%
24%
33% 35%
80%
57%
60% 61%
60% 78%
84%
76%
67% 45 nm
40%
59% 57%
65 nm
38% 75 nm
36% 34%
20%
≧0.10μm
10% 20%
0% 7% 3% 4%5% 5% 3% 3%2% 2%2% 2%3% 6% 3%5% 1% 1%
13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 2012 2013 2014E
15
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Business update – NOR Flash equivalent density shi ment p

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750 Density shipment index:
2009Q1 =100
569
542
530 505
480
500
460
422 425
382 390
360
317
299
298
272 270 256
250
250 227
192
173
100
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2009 2010 2011 2012 2013 2014
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Current status of memory business

� NOR flash business

• 75nm products represented 30% of NOR business in 14Q2

• 55nm parallel / serial 1Gb NOR CS was in pilot-run production in 14Q2

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High density Mid density (32Mb~128Mb) Low density

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Low density
NTD % 100% NOR (by tech & sales) NTD % NOR (by density & sales)
7% 100%
7%
15% 19% 23% 26% 28% 30% 21% 12% 16%
33%
80%
80%
55%
60% 60% 54%
53%
93%
85%
40% 81% 77% 74% 72% 70% 79% 40%
67%
75 nm 20% 20% 38%
34%
≧ 0.10µm 31%
0% 0%
13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 2012 2013 2014E 2012 2013 2014E
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Business update – NOR Flash breakdown & outlook

2014Q2 NOR

Revenue breakdown

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Consumer,
Comm,
33%
19%
•OTHERS includes
Industrials and others
Computer, Handset,
22% Auto, 9% 12%
Others, 5%
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2014Q2 NOR QTY breakdown

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QTY.
(M ea) Computer Consumer Communication Handset Auto
-
3% QoQ +13% QoQ +4% QoQ -3% QoQ +12% QoQ
200 -2% YoY +20% YoY +1% YoY -10% YoY -5% YoY
150
150 150 150 150
100
100 100 100 100
50 50 50 50 50
0 2014Q1 2014Q2 0 2014Q1 2014Q2 0 2014Q1 2014Q2 0 2014Q1 2014Q2 0 2014Q1 2014Q2
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Current status of memory business

� NAND flash business

• 75nm 1Gb 3V (for automotive) NAND CS was qualified in 14Q2

• 36nm 4Gb MCP NAND CS (for STB/networking) was sent for qualification in 14Q2

• 36nm 8Gb SLC NAND ES (for handsets) was sent for qualification in 14Q2

NAND Flash equivalent density shipment

2014Q2 NAND

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Density shipment index: 2013Q1 =100
20,000
Revenue breakdown 17,186
15,000
Comm,
Consumer, 50%
10,000
41%
Others, 8%
4,321
5,000
Computer,
2,030
1,483
1%
100 316
0
2013Q1 Q2 Q3 Q4 2014Q1 Q2
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•OTHERS includes Industrials and others

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Agenda

Welcome C.Y. Lu 2014Q2 Financial Results Paul Yeh Business Update C.Y. Lu Remarks and Q&A C.Y. Lu

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Copyright © Macronix International Co., Ltd. 20
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For more information regarding Macronix http://www.macronix.com

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For all inquiries, suggestions and comments ir@mxic.com.tw